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Debt Management
Case Studies

Henry called in from Columbus Ohio in October 2008. He owed 9 different creditors a total of $10,254 at interest rates ranging from 21%-29%. His monthly minimum credit card payment was $366, which he would have had 5 to 20 years to repay his debts. His FICO score? was 476.

Being put on a debt management plan gave him a minimum monthly payment of $376 at an average interest rate of 12%. His plan will take 3 years to pay off. As of November 2009, his credit score had risen to 579.

Henry is benefitting from his interest rates lowering to an average of 12%, allowing him to pay off his debts much faster. By paying only $10 more than his previous minimum monthly payment, Henry will pay off over $10,000 in debt in 3 years instead of 5 to 20. Also, his credit score went up 103 points after the first 13 months of his 3-year plan.

Note: This is an actual Springboard DMP client. The client?s name and possibly location has been changed to protect their privacy. Read More Debt Management Case Studies >>

Real-life Client Examples

Examples of actual people who are successfully managing their debt and rebuilding positive credit histories with a debt management plan



When you enroll in a debt management plan (DMP), you will experience a few benefits right away:

  • Lowered interest rates ? Many creditors offer lower interest rates to DMP clients.
  • Lower monthly minimum payments ? Some creditors offer a lower interest rate plus lower minimum payments to make it easier for you to afford your new DMP payments.
  • Shorter payoff time ? Traditionally, making only the monthly minimum payment means it will take many years to repay a credit card debt. With a DMP, your debts are fully repaid in five years or less.

    Credit score impact: When you begin a Debt Management Plan, your credit lines are closed and you agreed to not use credit while on the plan. Because of the way FICO calculates credit scores, the closed accounts appear to be ?maxed out? and your credit score can potentially go down temporarily at the start of the plan. Because you have just agreed not to use credit while on the plan, you will be denied if you apply for new unsecured (credit card) credit. As soon as you complete or leave the DMP, you are again eligible for new credit. Your credit report contains an annotation that you are on a DMP, however it is not calculated into your FICO score and is only viewed by underwriters when applying for new credit. This DMP annotation is not a negative mark, so don't expect that to harm your credit score now or in the future.

    In the long term, your credit score will begin to reflect your regular credit payments, your credit lines being paid down and pre-existing late accounts being brought back to current. These are all positive credit history marks that can make a significant long-term impact on your credit score. Read below how a DMP has affected a few of actual people.

    Client Source: Springboard Nonprofit Consumer Credit Management

    Client Profile: Meagan

    Meagan came to us from Burbank, California in October 2008. She owed $69,061 from 6 different credit cards and other unsecure debts, with interest rates from 13% to 30%. Her monthly minimum credit debt payment was $2,097, and she was on track to take 19 years to pay off her debt. Her FICO™ score was 498.

    After providing Meagan with free credit counseling, we proposed a new monthly consolidated payment of $1,673, at an average interest rate of 16%. Total time to pay off her debts: five years. 13 months after enrolling in our plan, her credit score had risen to 572.

    Meagan benefited from concessions offered by her creditors which lowered her interest rates to an average of 16% and her monthly payment by $424. More importantly, this new consolidated lower monthly payment will enable her to pay off the entire $69,061 in 5 years. In addition, Meagan?s credit score increased 74 points in just one year now that she is current on all of her debts and made payments on time each month.

    Client Profile: Antonia

    Antonia also came to us in October 2008, from Pomona, CA. She owed $13,325 to 7 different unsecured creditors. Her average interest rate was 27%. Her monthly minimum payments were $515 . Her FICO™ score was 482.

    We set up a Debt Management Plan with a consolidated monthly payment of $417, at an average interest rate of 24 %. Her plan will take 5 years to pay off. After just over a year on the plan, her FICO score? rose to 566.

    The concessions granted by Antonia?s creditors lowered her monthly payment by almost $100, and dropped her average interest rate by from 27% to 24%. Plus she?ll repay her entire debt of $13,325 in five years. Also, her credit score rose 84 points after 13 months of making regular DMP payments.

    Client Profile: Henry

    Henry called us from Columbus Ohio in October 2008. He owed 9 different creditors a total of $10,254 at interest rates ranging from 21%-29%. His monthly minimum credit card payment was $366, which he would have had 5 to 20 years to repay his debts. His FICO score? was 476.

    Our Debt Management Plan gave him a minimum monthly payment of $376 at an average interest rate of 12%. His plan will take 3 years to pay off. As of November 2009, his credit score had risen to 579.

    Henry?s interest rate was brought down to an average of 12%, allowing him to pay off his debts much faster. By paying only $10 more than his previous minimum monthly payment, Henry will pay off over $10,000 in debt in 3 years instead of 5 to 20. Also, his credit score went up 103 points after the first 13 months of his 3-year plan.

    Note: These are actual Springboard DMP clients. Only their names and possibly their locations have been changed to protect their privacy.

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